Monday, November 01, 2010, 04:30 pm PT (07:30 pm ET)
Apple, Google in secret talks with mobile payments startup BOKUA new report claims both Apple and rival Google have been meeting with executives from BOKU, a leading mobile payments startup, to discuss a possible acquisition or wide-reaching partnership.
San Francisco-based startup BOKU aims to bring "bank-grade payments technology" to mobile platforms and create the standard for online payments using a mobile phone. Key partnerships with global carriers allow BOKU to claim it reaches 1.8 billion customers worldwide.
According to TechCrunch, BOKU President and CEO Mark Britto and co-founder Ron Hirson have met with Apple executives in charge of the iPhone several times over the past 3 weeks.
At the same time, BOKU has also allegedly participated in "high-level meetings" with Google Director of Engineering Michael Morrissey, who heads Google Mobile Services for Android, including the Android Market app store. BOKU has already partnered with Android developers to offer in-app purchases for Android apps.
Sources have yet to confirm whether Google is interested in an "outright acquisition " of the startup, but with both Apple and Google doing some "serious sniffing," the result could be a bidding war. The price tag on BOKU, which has brought in a number of "big-name investors," could reach 9-digits, reportedly costing Apple between $250-450 million, although TechCrunch was unable to fix an exact price at this stage in the negotiations.
With both companies looking for a mobile payments solution, negotiations with BOKU could reprise last year's race to acquire a mobile advertising agency. In late 2009, ad-seller AdMob attracted the attention of Google and Apple, with Google eventually acquiring the company for $750 million, just weeks after Apple reportedly approached the company.
According to The New York Times, Apple made a formal bid to acquire AdMob for $600 million. "While Apple conducted due diligence on the deal, AdMob agreed to a 45-day 'no shop' provision, a routine clause that prevented the start-up from offering itself for sale to others, according to three people briefed on the negotiations. But after Apple inexplicably let 45 days pass without consummating its offer, Google pounced," noted the Times report.
Just 3 days after AdMob's "no shop" provision with Apple expired, Google purchased AdMob. The search giant was willing to pay a large premium for AdMob simply to keep the company out of Apples arms, an executive familiar with Googles acquisitions strategy told the Times.
After Apple failed to acquire AdMob, it turned to Quattro Wireless, paying $275 million to purchase the smaller mobile ad company. Quattro helped lay the groundwork for Apple's interactive iAd program.
"We don't know much about this advertising thing," said Apple CEO Steve Jobs when he announced iAd in April. "We tried to buy a company called AdMob, and Google came in and snatched them because they didn't want us to have them. We bought a smaller but still great company called Quattro."
With $51 billion in cash and reserves, Apple can afford to purchase BOKU, even in a bidding war. Last month, Jobs hinted that Apple could be looking into using its hefty war chest for more acquisitions.
"We strongly believe one or more strategic opportunities will come along we're in a unique position to take advantage of," Jobs said during the company's conference call for the fourth fiscal quarter of 2010. "We don't let the cash burn a hole in the pocket or make stupid acquisitions. We'd like to continue to keep our powder dry because we think there are one or more strategic opportunities in the future."
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